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Employers may take lead if Obamacare collapses

Experts say employers and insurance companies  not the government  will drive health-care changes if the Supreme Court strikes down President Barack Obamas overhaul.

WASHINGTON  If the Supreme Court strikes down President Barack Obamas health-care overhaul, dont look to government for what comes next.

Employers and insurance companies will take charge. Theyll borrow some ideas from Obamacare, ditch others and push even harder to cut costs.

Heres what experts say to expect:

Workers will bear more of their own medical costs as job coverage shifts to plans with higher deductibles, the amount you pay out of pocket each year before insurance kicks in. Traditional insurance will lose ground to high-deductible plans with tax-free accounts for routine expenses, to which employers can contribute.

Increasingly, smokers will face financial penalties if they dont at least seriously try to quit. Employees with a weight problem and high cholesterol are next. Theyll get tagged as health risks and nudged into diet programs.

Some companies will keep the health-care laws most popular benefit so far, coverage for young adults by their parents plans until they turn 26. Others will cut it to save money.

Workers and family members will be steered to hospitals and doctors that can prove that they deliver quality care. These medical providers would earn part of their fees for keeping patients as healthy as possible, similar to the accountable-care organizations in the health-care law.

Some workers will pick their health plans from a private insurance exchange, another similarity to Obamas law. Theyll get fixed payments from their employers to choose from four levels of coverage: platinum, gold, silver and bronze. Those who pick rich benefits would pay more.

Employers had been the major force driving health-care change in this country up until the passage of health reform, said Tom Billet, a senior benefits consultant with Towers Watson, which advises major companies. If Obamacare disappears ... we go back to square one. We still have a major problem in this country with very expensive health care.

Business cant and wont take care of Americas 50 million uninsured.

Republican proposals for replacing the health-care law arent likely to solve that problem either, because of the partys opposition to raising taxes. The GOP alternative during House debate of Obamas law would have covered 3 million uninsured people, compared with more than 30 million under the presidents plan.

After the collapse of then-President Bill Clintons health-care plan in the 1990s, policymakers shied away from big health-care legislation for years. Many expect a similar reluctance to set in if the Supreme Court invalidates Obamas Affordable Care Act.

Starting in 2014, the law requires most Americans to obtain health insurance, either through an employer or a government program or by buying their own policies. In return, insurance companies would be prohibited from turning away the sick. Government would subsidize premiums for millions now uninsured.

The laws opponents argue that Congress overstepped its constitutional authority by requiring citizens to obtain coverage. The administration says the mandate is permissible because it serves to regulate interstate commerce. A decision is expected in late June.

The federal insurance mandate is modeled on one that Massachusetts enacted in 2006 under then-Gov. Mitt Romney. That appears to have worked well, but its unlikely states would forge ahead if the federal law is invalidated because health care has become so politically polarized. Romney, the likely Republican presidential nominee, says hed repeal Obamacare if elected.

That would leave it to employers, who provide coverage for about 3 out of 5 Americans younger than 65.

With or without health-care reform, employers are committed to offering health-care benefits and want to manage costs, said Tracy Watts, a senior health-care consultant with Mercer, which advises many large employers. The health-care reform law itself has driven employers, as well as the provider community, to advance some bolder strategies for cost containment.

First, employers would push harder to control their own costs by shifting more financial responsibility to workers.

Data from Mercers employer survey suggests that a typical large employer can save nearly $1,800 per worker by replacing traditional preferred-provider plans with a high-deductible policy combined with a health-care account. That is very compelling, said Watts.

It wont stop there. Many employers are convinced they have to go beyond haggling about money, and also pay attention to the health of their workers.

As important as it is to manage the cost of medical services and products, and eliminate wasteful utilization, there has been a strong recognition that ultimately healthier populations cost less, said Dr. Ian Chuang, medical director at the Lockton Companies, advisers to many medium-size employers. His firm touts programs that encourage employees to shed pounds, get active or quit smoking.

Employers may take lead if Obamacare collapses

Associated Press file photo

FILE

Experts say employers and insurance companies  not the government  will drive health-care changes if the Supreme Court strikes down President Barack Obamas overhaul.